Tens of millions of people start selling on Amazon with the same goals in mind. They want to start their own business. They want to be able to earn money without punching a timeclock and without being on-call 24 hours a day. They want to be able to work from home and make money while they sleep.
And millions of people achieve significant success by selling on Amazon. Millions more miss their opportunities to achieve financial independence by selling on Amazon because of avoidable Amazon seller mistakes. In this article I’ll discuss 10 of the most common Amazon seller mistakes you must avoid to be a success on their platform. But before we get started, we want you to understand the importance of learning from our experience so you don’t make the same Amazon seller mistakes I did.
Probably like you, I spent a lot of my spare time reading everything I could about how to make money on Amazon before I ever got started. I thought I knew everything I could possibly need to know to make my Amazon pages a success.
My first year on Amazon, I spent about $10,000 more than I earned. I missed opportunities to make sales. I nearly quit selling on Amazon until I took a pause to evaluate what I was doing right and what I was doing wrong. I wish I had had someone like me to tell me what I needed to change to make money on Amazon a lot faster than I did. Simply having a tool like AMZ.one would probably have made a major difference, but in addition to getting one major thing right — using AMZ.One to find products, identify keywords, track sales, and prevent my pages from being hijacked — I would have avoided these 10 critical Amazon selling mistakes.
1. I didn’t spend enough time doing market research before I started marketing my products.
I used to lie awake half the night dreaming about selling the perfect product on Amazon. Dreaming about the perfect product is nice, but actually finding that product is absolutely essential to success. I did too much dreaming about the perfect product and didn’t spend enough time looking for it.
It’s natural to want to sell products you are interested in and products that are currently in high demand. The first product I sold on Amazon was a trending product, one that had a top-5 sales ranking and that “should” have sold like the proverbial hotcakes.
I thought I had a winner. I thought my product would be super-easy to sell. Unfortunately, I made a common beginner’s mistake:
I recognized that my product was popular, but I didn’t take into consideration the fact that lots of other Amazon marketers were selling it.
If I had spent time looking at my product on Google Trends, I Would have found out that my product had already peaked and demand was on the way down. If I had looked through Amazon to see how many other pages were selling the same product, I would have recognized that the only way to stand out in the crowd was to compete on price. And if I had taken into account the fact that Amazon charged not just me but all of my competitors warehousing fees to store my product while it was waiting to be sold, I would have realized that some competitor might wind up giving the product away just to get it out of Amazon’s warehouse.
If you want to avoid this mistake, you need to do a lot of market research before you ever get started. You need to understand your product niche inside out. You need to make sure your product is at the bottom of the curve on Google Trends, not at the top. You want to have your products on the market as the market trends are still predicting “explosive growth” and before interest trends go flat.
2. I didn’t look for products with high profit margins.
Profit is what selling is all about. Profit puts money in your bank account. High profit margins don’t just increase your income. They also give you a buffer against other kinds of mistakes you inevitably make as you are learning how to maximum your sales on Amazon.
One of my early mistakes was that I didn’t focus on products that have high profit margins. I just assumed that if I sold a product for a profit, and the end of the month, or at the end of a few months, the balances in my bank accounts would go up. What I failed to consider was that my profits would be reduced when I took all of my expenses into account.
I didn’t miss any obvious expenses. I knew my cost of goods sold. I knew about Amazon fees and shipping costs. Where I messed up was not looking at what Amazon charged for fulfillment, that is, picking, packing, and shipping. I also failed to consider my costs for Amazon’s generous return policies. Once the cost of goods sold, Amazon fees, shipping costs, fulfillment cost, and returns were all charged against my account, I was only making about $1.30 on an item that sold for $49.95. I had failed to take into account that I needed healthy profit margins to cover unexpected expenses.
If I had been using a product like AMZ.One from the very beginning, I could have found products that had higher profit margins so I knew I was really making a profit on every sale. Instead, after customer returns kicked in, I was actually losing money on each sale of my first product.
Just how high does a profit margin need to be to make sure you are really making money when you sell on Amazon? As a rule of thumb, you should only sell products that have a profit margin of 20% or more.
3. I didn’t try to compete on price.
One of the consequences of mistake #2, failing to make sure that I was selling products with a healthy profit margin, was that i couldn’t lower prices to beat my competition later. Amazon has a tool for ranking products from low price to high price. If your product is just $0.01 less expensive than your competitor’s identical product,, Amazon will display your product above your competitor’s.
There are Amazon sellers who monitor prices, it seems, 24 hours a day to keep their products just a penny cheaper than any other seller’s. I believe there are better ways to spend my time. I now monitor my products to make sure my prices are competitive, but I also rely on the quality of my products and service, as well as the information about my products I provide on my sales pages, to offer the best value, not just the lowest price.
So now you see the importance of rule #2. If you try to sell products with low profit margins, you’ll wind up having to list your products at the same price as your competition to make any profit at all. Starting with a higher profit margin gives you more room to compete on price. Here’s the rule to remember:
Higher profit margins allow greater price competition.
4. I thought in terms of products instead of brands.
It’s hard to make money on Amazon when you are selling the same product at the same price with the same shipping costs as a hundred other sellers. One way to break free from price competition is to compete on the basis of brand, selling products that become associated with your quality, your honesty, and your responsiveness to your customers.
The best way to create a brand is to start with a private-label product. A private-label product is manufactured for you. It’s not something you buy from the same distributor as a thousand other sellers. (Well, maybe it actually, especially in the case of private-label nutritional supplements and skin care products, but you can compete on the basis of the unique information and insights you have for your product.)
My first product languished on Amazon. I didn’t get customers a reason to choose my product over everybody else’s. I didn’t make it special. I offered a generic product.
The rule to remember is:
Having your own brand gives you something unique to market.
You can tell your own story. You can show Amazon customers what kind of human being you are. You can show that you care. You can’t do that if you are just selling someone else’s product
5. I didn’t read Amazon’s policies carefully.
I was so energized by getting my product on Amazon that I didn’t take the time to read Amazon’s terms and conditions with care.
Amazon means business with it’s policies. They sometimes terminate seller accounts for infractions of their terms and conditions. In my enthusiasm to start selling, I erred by:
- Using promotional text in my product images and
- Including my email address in my listing.
I was lucky that Amazon just sent me a policy warning and I was able to edit my pages to meet their terms and conditions without any penalty to my seller account. After getting my warning notices, I spent a full day reading Amazon’s Quick Start Sales Guide. I should have read it first.
6. I thought I couldn’t compete in a niche that already had well-established sellers.
There are people who have sold their products on Amazon for over 20 years. They have thousands of products. They have thousands of five-star reviews. How could I possibly compete with a seller who has 2,000 five-star reviews when I don’t even have my first review?
Here’s what I learned about competing with sellers who had — and even still have — far more products and far more reviews than mine:
Everybody who sells products on Amazon starts with zero products and zero reviews. There are other ways to establish credibility.
A shortcut to projecting an image of credibility and trustworthiness is to have a professionally designed logo that you display on a professionally designed website. Anything that projects professionalism adds to your credibility. It makes your business seem more legitimate. It puts prospective customers in the mindset of looking for reasons to buy your product rather than looking for reasons to reject your brand.
But don’t stop there.
7. I didn’t ask my customers to leave reviews.
If you don’t ask customers to leave reviews of your product, chances are they aren’t going to tell the world how happy they are with it all on their own. People don’t need additional motivation to leave bad reviews, but they need encouragement to leave good reviews.
Don’t get so caught up in making sure everything else is running smoothly that you forget to solicit customer feedback. Sure, Amazon will send out emails asking your customers to leave a review, but it always helps to follow up personally to make sure your customer is satisfied with your product, letting you know about any fixable issues, and asking them to leave a product review on your Amazon product page.
Just be sure to follow Amazon’s policy for soliciting customer reviews:
Never offer an incentive for a customer to give you a good review. And never ask for a positive review.’
Ask for reviews in general terms. Don’t be afraid of negative reviews. When you get negative feedback, and you inevitably will, you can use that feedback as an opportunity to show your care for your customers and the responsible way you treat them.
8. I didn’t use quality copy and professional photography..
Writing a sales copy looks easy. The truth is, not everyone can write it.
If you can’t afford to hire professional writers, it’s OK to write your own product descriptions, but invest some time in reading up on sales techniques and copywriting first. Pay attention to things like whether you list all the positive selling points about a product first or at the end of your copy (and when), how much detail to offer about your product (and where), and how to match your level of writing to what your prospective customers find the most appealing.
The same principle applies to photography. You don’t want your product photos to look like everybody else’s product photos. You may want to show photographs of your product in action. Better yet, add some video of how to use our product in ways that customers don’t usually think about. Add value to your product by the way you picture it and the way you show it in ation, and you will gain a competitive edge.
Remember: Your listing on Amazon is your only opportunity to convince a visitor to your page to buy now.
Your listing is all you’ve got, and buyers make decisions in seconds whether they will seek more information, buy your product instantly, or move on to another listing.
9. I tried to sell to everybody.
Wouldn’t it be great if you could sell your product to everybody? If everybody loved your book or your kitty litter box or your homemade banana muffin mix?
One of the hardest things to get into your selling mindset, or at least one of the hardest things for me to get into my selling mindset, was that I couldn’t possibly sell my products to everybody. I had to find my ideal customers and sell to them.
When you know who is buying your product, you can customize your listing to persuade that one group of prospective customers that is the most likely to become your happy customers.
Marketers call ideal customers “buyer personas.” Every buyer persona is a generalized, fictional representation of a customer you are targeting with your page. There’s no reason you have to limit yourself to a single buyer persona. Digital marketers often have two, three, or more buyer personas to help them plan their sale pitch.
Next comes the hard part: You need to (1) make specific features of your page (color scheme, choice of photographs, level of language, degree of detail) that are attractive to your buyer persona(s), and (2) keep track of what works for you.
How do you create a buyer persona before you have ever listed a product on Amazon?
- Think about who is most likely to buy your product.
- Think about why this person would buy your product.
- Write out a generic description of this person. Think about what would be a dealbreaker with this person. Think about what it is about your product that would appeal to them.
When you work from a buyer persona, your sales copy can read like you are really talking to your potential customer. You can make a bond with the customers that are most likely to buy your products.
10. I didn’t have a marketing strategy.
When I started selling on Amazon, I assumed that all I needed was for people to find my product and buy it. It didn’t occur to me at first that I could help people find my product so they could buy it.
The sellers who make the most money on Amazon spend the most time and money on marketing. They use social media marketing on Facebook and Pinterest. They invest in SEO. And they do content marketing to inform customers and keep them in touch with developments in their product niche. These efforts pay off with repeat customers who keep on buying your product.
Everyone who starts selling online is going to make some mistakes along the way. It’s just the way the learning process works. If you don’t make any mistakes at all, you probably aren’t trying hard enough. But with AMZ.One on your side, you can do a lot of things right to make your path to success as smooth as possible to earn a great income selling on Amazon.